Apollo Commercial Real Estate Finance Refinances All TALF Borrowings
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) announced today that it utilized additional capacity under the Company's master repurchase agreement with Wells Fargo Bank, N.A. to refinance all of the Company's debt outstanding under the Term Asset-Backed Securities Loan Facility program administered by the Federal Reserve Bank of New York.
Prior to the refinancing, the Company had TALF borrowings totaling $250.3 million with a weighted average cost of funds of 2.8%. Those borrowings were secured by AAA-rated commercial mortgage-backed securities with a face amount of $298.6 million.
By moving the CMBS to the Wells Facility, the Company was able to increase the advance rate and lower the cost of borrowing, resulting in $264.4 million of borrowings with a current weighted average cost of funds of approximately 1.9%. The Company entered into interest rate swap agreements with an initial aggregate notional of $56.3 million.
Stuart Rothstein, Chief Financial Officer of the Company, commented, "By actively managing the right side of the Company's balance sheet, we were able to complete a transaction which generates approximately $14.0 million of investable capital and lowers the overall cost of borrowing. In addition, the Wells Facility extends the maturity of the Company's borrowings by five months and enables the Company to benefit to the extent loans underlying the CMBS bonds are extended."
As previously disclosed, the Company increased the size of the Wells Facility from $250.0 million to $506.0 million during December 2011. Borrowings resulting from the additional capacity will bear interest at a per annum rate of 30-day LIBOR plus 1.5%. The Wells Facility matures in August 2013.
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